Trump’s Emergency Motion on Fed Backfires Instantly

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1:28Michael Popok:You know who's participating in the Federal Open Markets Committee meeting today and going to be voting on what interest rates are charged to banks and therefore impacting our economy? Lisa Cook. She's on the Federal Reserve Board of Governors because a federal district appellate court ruled in her favor late yesterday, two to one. I have a copy of it here. Judge Garcia, Judge Childs, voted in favor of keeping her in her job on the Board of Governors, finding that she was denied due process by Donald Trump, who tried to fire her by mean social media posting, never giving her the opportunity to be heard, never giving her the opportunity to put forward the evidence that she didn't commit mortgage fraud, which is what Donald Trump's minions have said in their false allegations against her, that she committed.

2:21Michael Popok:How about giving her due process before you take away the remainder of her 13 years on the Independent Federal Reserve Board of Governors? How about that? That's what the new ruling says. I'm going to read to you from certain parts of it, and I'm going to explain to you why the one Trump appointee in there, Judge Katsas, why he was in dissent. And then we'll talk about the breaking news within the breaking news, which is that Donald Trump's not taking no for an answer, despite the fact that he couldn't stop her from participating in the committee meeting. He's going forward with an emergency application to the United States Supreme Court to try to get rid of Federal Reserve Governor Lisa Cook because she checked the wrong box on a mortgage.

3:06Michael Popok:Or maybe she didn't. I'm Michael Popak. You're on Midas Touch and on Legal AF. Let's get to the Lisa Cook saga. Why does it matter? It goes to the heart of the independence of the Federal Reserve. Because if Donald Trump can fire people at will without regard to whether they did anything, then he could just take over the Federal Reserve. And now he's in control of fiscal policy, which he's failing at. That's why our jobs numbers are so bad. That's why our economy is in a wreck. and he could take control of monetary policy, i.e. the amount of money that flows through the American economy leading to hyperinflation.

3:43Michael Popok:We never want the same person to be able to have one hand on monetary policy and one hand on fiscal policy, ever. Bad things happen when that happens. Now, Lisa Cook didn't do anything wrong. And if she did, she certainly had the right to due process. She filed when Donald Trump tried to fire her, she filed an emergency lawsuit and motion for injunctive relief with Judge Cobb. Judge Cobb ruled after an evidentiary hearing in her favor, finding that Donald Trump both violated her due process rights because he relied on a social media posting by Bill Pulte, the Nepo baby billionaire heir to the Pulte construction fortune, who now runs Freddie May and Fannie Mac.

4:29Michael Popok:but in his spare time is Donald Trump's pit bull to go after and target Democrats for alleged mortgage fraud, except he got it wrong because other credible news sources have gotten their hands on evidence about her loans and have determined that she told the truth to her lender. She told them the second home was a second home and a vacation home and not her primary residence. She's not taking the property tax break that she's entitled to in two different places, only one. That's reserved for Mark Pulte's parents who have been found out that they're running two primary residences, which they're not allowed to have, one in Michigan and one in Florida.

5:10Michael Popok:Judge Cobb also said the four cause, which is required by the United States Supreme Court and reaffirmed in a decision from May, The four cause that's required to terminate somebody on the board of governors, the Federal Reserve, has to be something she does on the job. Has to be something that's done on the job as part of her statutory duties. It has to be inefficiency, malfeasance, or neglect of duty. It can't be something that happened before. Now, Judge Katzis, in his dissent, which I'll read to you from, says, what does that mean? Does that mean she could commit murder and leave her on? No, Judge Katzis, because that would make her ineligible to continue to serve because she's now been convicted of murder.

5:54Michael Popok:And that's what the case law says. So it's neglect of duty and efficiency and malfeasance, but also it goes down to basic qualifications or ineligibility. And a murder would make her ineligible. See how you fix that? That problem of your own creation. Let me read to you from the order. Two to one. Judge Childs and Judge Garcia, who wrote the decision joined by Judge Childs. Here is the easy summary. I'll post this on Legal AF Substack. Here's the easy summary of this decision. They did not rule on the for cause. Does purported mortgage fraud, which based on the new evidence, did not occur, does that rise to the level of for cause termination for somebody on the Board of Governors, yes or no?

6:52Michael Popok:They said, we don't even have to get there. And that's smart because they're in an emergency posture. They're the emergency appellate panel thrown together because of the emergency application by Donald Trump. Down the road, there will be the merits consideration of the appellate issues after a full or more fulsome trial and record. This group may be pulled back together again as the merits panel, or it may be a new panel. Really depends. Depends on the court. And sometimes they try to give it back to the same judges, but sometimes they don't. So this is their decision for now on a non-merits basis, just based on, at the moment, the emergency issues.

7:37Michael Popok:And so they said, we're just going to deal with due diligence. We're just going to deal with due process. Did she get it or not? Because that does solve a lot of the problems. Because if she got due process, which is an ability to defend herself, usually in writing against charges that are put in writing to her, and then a hearing of some sort, she'd be able to bring in the evidence that she didn't commit any mortgage fraud. So the due process was the right angle, I believe, for this court to focus on. Now, having found that she had a property right in the continuation of her Federal Reserve governorship for another 13 years, that gives her then, that triggers Fifth Amendment due process rights because you're not allowed to have, people aren't allowed to take your property away without giving you some sort of due process to defend yourself.

8:24Michael Popok:So that is one thing that they rejected all the Trump cases that suggested that there is no property interest in an employment position. They said there is one when you're being given the governorship of the Federal Reserve and you're being protected from firing by a four cause layer of protection. That is property. They also ruled that they have the right to do a review of Donald Trump's actions. That it's he argued that, oh, the federal courts can't provide oversight. I can do whatever I want in the employment arena. I can fire whoever I want. Whatever I say is cause is cause and that's it. And the court said, no, that's not that.

9:04Michael Popok:We get to do our job, our Article 2 job. And then they went over why due process was not properly given, effectively admitted by Trump, even though Trump was like, but we had a social media post by Bill Pulte. And then I reposted it. And then Pam Bondi opened up a criminal investigation. Isn't that enough? There was a letter. No, that's not enough. The American dream has changed. Forget the white picket fence. For most Americans, the real dream now is getting out of debt. If you're feeling the pressure from rising prices, mounting credit card debt, and just trying to stay afloat, I want you to know there's a way out.

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10:16Michael Popok:Go to donewithdebt.com. That's donewithdebt.com. So the court says on page six, because Cook's due process claim is very likely meritorious, there's no need to address the meaning of for cause in the Federal Reserve Act. On page five, they say the consequences of concluding that officers with for cause removal protection may invoke due process protections are limited for the simple reason noted above. Most principal officers are removable at will. If Cook were too, she would plainly have no interest protected by the due process clause. But Cook enjoys uncontested for-cause protection, so she does have that interest.

11:00Michael Popok:One judge of this court previously concluded that the Supreme Court's due process precedent suggests that an officer with removal protections would be constitutionally entitled to some procedural protections before removal, like a notice and a hearing. That is essential. And none of those things were given to her. When you read Katzis in his dissent, he's so far right that he's already convicted her of mortgage fraud. He doesn't say based on the alleged or allegations of mortgage fraud. He says that there are apparent misrepresentations Cook made in applying for home mortgages. He's already convicted her on the first page of his dissent.

11:43Michael Popok:In my view, he finds that Cook does not have a constitutionally protected property interest in her office, therefore has no due process rights. And the fore clause was properly exercised by Donald Trump. Now, this is going to go to the United States Supreme Court. That's the final word in this. Right now, she's obviously participating, Lisa Cook, in the September 6th, Today and Tomorrow's Federal Open Markets Committee meeting, which is comprised of seven of the Board of Governors and five additional representatives or committee people taken from the 12 in total regional bank presidents for the Federal Reserve.

12:24Michael Popok:They rotate in. Five come in at one time. They make a committee of 12. They set the rates. She's doing it already. So the next time she's going to do anything of substance, apparently, is next month. So the Supreme Court is going to have to consider on an emergency application that Donald Trump has threatened to file. And I'm sure by the time this goes up, he will have filed. And I'll tell you what that's going to look like, because I don't have to see it in order to report on it, because I've seen these enough. It's going to be an emergency application for a stay and in addition to that, for an appeal on this particular issue.

13:00Michael Popok:It's going to be brought by John Sauer, who is the Solicitor General of the United States, Donald Trump's former criminal defense appellate lawyer. It will ask Judge Roberts, Justice Roberts, who's the first judge to decide, to make the decision to grant the stay. if he grants the stay blocking Judge Cobb's decision, Lisa Cook is out of the job until they consider it. And I don't believe he's going to do that. He will then refer it over to the entire nine of the federal, of the Supreme Court to make their decision. Four votes to take up the appeal is fine. Five votes to one way or the other is enough to either keep her in the job or take her out of the job.

13:40Michael Popok:What should happen is that even if Roberts grants a stay, which he could, a temporary stay, until they have the full briefing, that will take her out of her job, changing the status quo, which is why I don't think he should do it. The status quo is she's participating. She's on the Federal Reserve right now. Let the record be developed by Judge Kopp. That's really what should happen. But they'll take up, if the MAGA get the votes with the six votes or five votes, they'll take this up with full briefing. They'll set an oral argument because it's such an important issue. And they'll have an oral argument in October or November.

14:21Michael Popok:That's what's going to happen, I believe. And then I'll report on it more and give you the full update on Legal AF Live Substack as we get the new filings. It hasn't happened yet, but that is what is going to happen to get this case before the United States Supreme Court. The rates are going to be voted on today. And I'm sure it's going to be a rate cut. I'd be shocked if it wasn't. Again, I'll update you on Legal AF YouTube and Legal AF Substack about those issues. Why should the Supreme Court keep Lisa Cook in her job? Because it would be consistent with what they ruled in May, which is that there needs to be a four-cause reason for termination.

14:58There must be due process before you remove a Federal Reserve governor.

15:03Michael Popok:Plain and simple. And the four-cause, based on the case law, has to be something that happened while she's on the job, not some false allegation about her applying for two first mortgages or two primary home mortgages. That can't be, based on the 100 years of precedent, that can't be the ruling. But we'll follow it right here on Legal AF and on the Midas Touch Network. Until my next report, I'm Michael Popak. Can't get your fill of Legal AF? Me neither. That's why we formed the Legal AF Substack. Every time we mention something in a hot take, whether it's a court filing or a oral argument, Come over to the Substack.

15:40Michael Popok:You'll find the court filing and the oral argument there, including a daily roundup that I do call, wait for it, Morning AF. What else? All the other contributors from Legal AF are there as well. We've got some new reporting. We've got interviews. We've got ad-free versions of the podcast and hot takes. Where? Legal AF on Substack. Come over now to free subscribe.

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17:06Michael Popok:If you love this episode, make sure you're subscribed to the Intersection Audio Podcast wherever you listen to podcasts. It's my solo ride, and we release new episodes daily, all completely free.